12 non-life insurance firms continue to sell products despite CDO

Twelve non-life insurance companies continued to defy the cease and desist order (CDO) issued by the Insurance Commission (IC) due to reports indicating rampant illegal activities in areas outside Metro Manila.

The IC warned the public not only to avoid doing business with the 12 insurers but also to report their activities.

IC Commissioner Benjamin S. Santos said they will file appropriate criminal charges against the offenders.

The 12 offenders are: First Integrated Bonding and Surety Co. Inc., TICO Insurance Co. Inc., the Imperial Insurance Inc., Luzon Insurance and Surety Co., Times Surety & Insurance Co. Inc., Wellington Insurane Co. Inc., the Capital Insurance & Surety Co. Inc., Mantruste Insurance Corp., Zenith Insurance Corp., Development Insurance and Surety Corp., and Mega Pacific Insurance Corp.

All the 12 had already been served CDOs, some as far back as 1990 and as recent as December last year.

The most recent are Zenith Insurance, Development Insurance and Mega Pacific Insurance.

The insurers suffered from various defects including insolvency, capital deficiency, and non-payment of claims.

Santos said they are also reviewing the entire non-life insurance sector.

"We want to have responsible players which the public can trust and feel secure with," the commissioner said, hinting that there are still several players under close scrutiny.

If the delinguent insurers remain insolvent or capital deficient, they would be placed under a conservator, and hopefully brought back to financial health. If for one reason or another the insurer is beyond saving, the IC will condemn it for liquidation.

Meanwhile, Santos said they are working on a circular sufficient safety nets for good insurers but stiff penalties for violators.

The IC will soon release a circular calling for an increase in authorized capital from the present P50 million to P100 million. By next year, it will be increased to P300 million by end 2007.